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Amazon's Online-Only Whole Foods Store Boosts Grocery Drive

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Amazon (AMZN - Free Report) is leaving no stone unturned to capitalize on the growing opportunities in the online grocery retail space.

The opening of a new Whole Foods store in Brooklyn, NY is a testament to the same. Notably, the new store is first of its kind as it is a delivery-only store, which will operate online only.

The store will deliver only online grocery orders in the Brooklyn area.

We believe the latest move remains a major positive, which is likely to strengthen Amazon’s presence in the grocery retail space.

Further, the move is likely to benefit the company during the ongoing pandemic scenario, which has resulted in a surge in the online grocery shopping as fears of contracting the deadly COVID-19 compel people to stay indoors.

Notably, Amazon delivered blockbuster performance in second-quarter 2020, driven by robust online grocery sales that tripled year over year.

Strengthening Grocery Drive

The latest establishment is in sync with the company’s strengthening endeavors toward expanding its grocery and physical stores.

Apart from the new Whole Foods store, the company has recently opened Amazon Fresh grocery store that is located at Woodland Hills neighborhood, LA.

The store marks the first Amazon Fresh supermarket which stocks meat, seafood, high-quality produce and a wide range of national brands.

Further, Amazon is planning to expand its Whole Foods stores network across the United States. Currently, it has more than 500 such stores.

Expanding Physical Presence

Moreover, growing number of grocery stores are in sync with Amazon’s strong efforts toward expanding its physical presence.

We note that the growing base of Amazon Go, which is a cashier less store of the company, remains a major positive. Amazon currently has more than 20 such stores. The company intends to scale this number to touch a record tally of 3,000 stores by 2021.

Further, expanding the Amazon 4-star store, which stocks four-star or beyond rated products, remains positive.

We believe Amazon’s expanding physical presence in the retail space is providing it with a competitive edge against the local stores as well as big retailers like Walmart (WMT - Free Report) , Target (TGT - Free Report) and The Kroger (KR - Free Report) .

Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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